What is the main source of law authorising this entity form?

Exempted Limited Partnership Act (as amended) of the Cayman Islands (the ELP Act).

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

An ELP does not have separate legal personality.

(Maximum) period of existence

An ELP has no maximum period of existence. Its term, if any, will be set out in its registration statement and its limited partnership agreement (LPA) and can be amended.

Governing document(s)

An ELP is governed by its LPA. At formation, the LPA will often be a short-form document entered into by the GP (as defined below) and an initial LP (which is usually an affiliate of the ELP's registered office provider). Typically, the LPA will then be amended and restated to set out the detailed commercial terms of the ELP and will form the basis upon which LPs will be admitted to the ELP (in place of the initial LP). The GP and the LPs may agree between themselves the terms governing the ELP, subject to a relatively light overlay of statutory provisions contained in the ELP Act. Some of the provisions of the ELP Act are mandatory, while other key provisions can be varied or waived in the LPA, as may be agreed between the partners.

Liability of incorporators / shareholders

An ELP must consist of: (a) one or more persons called 'general partners' (each, a GP) who, in the event that the assets of the ELP are inadequate, will be liable for all debts and obligations of the ELP; and (b) one or more persons called limited partners (each an LP) who will not be liable for the debts or obligations of the ELP except: (i) as provided in the LPA; (ii) in certain circumstances where an LP takes part in the conduct of the business of the ELP in its dealings with persons who are not partners; and (iii) where an LP is required to return payments representing a return of its contribution or a release of any outstanding obligation in respect of that person's commitment in the circumstances described in the ELP Act. A GP may take an interest as an LP in an ELP.

(Governing) bodies

The governing body of an ELP is its GP. Any rights or property of the ELP are held or deemed to be held by the GP upon trust as an asset of the ELP in accordance with the terms of the LPA. All letters, contracts, deeds, instruments or documents must be entered into by or on behalf of the GP (or any agent or delegate of the GP) on behalf of the ELP.

Other particularities

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions and divestitures, equity acquisitions, conversions etc.)?

There are no restrictions from a Cayman Islands law perspective on the ability of an ELP to be involved in international transactions and restructurings (however, there are no statutory merger provisions in the ELP Act and therefore any such proposal would require additional structuring).

Can this type of entity be publicly listed or held, or its securities be issued to members of the public?

Yes.

Can this type of entity be used for a non-profit or charitable organization?

Yes.

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

Involvement of notary, company register, governmental authorities

The main documents required for formation and registration are:

• an LPA; and
• a registration statement providing the name of the ELP, the general nature of business, the address of the registered office in the Cayman Islands, the term of the ELP (including commencement date), the full name and address of the GP(s), and a declaration that the ELP shall not conduct business with the public in the Cayman Islands other than in so far as necessary for the carrying on of the business of that ELP exterior to the Cayman Islands.

Timing (estimate)

The Registrar of Exempted Limited Partnerships (the Registrar) is the governmental authority involved in the registration of ELPs.

Main costs, including registration and similar fees (excluding legal fees)

A partnership is formed upon the signing of the LPA. The term typically commences upon the partnership being registered with the Registrar as an ELP. An ELP can be registered on a same day basis. No prior government consents or approvals are required. Registration documents will usually be returned by the Registrar within five to seven working days, although there is an express service available (for an additional fee) under which documents will be returned usually within one business day.

The fees payable to the Registrar on registration are approximately US$1,222. Typically, the ELP's registered office provider will also charge an administrative fee for submitting the registration application and attending to ancillary filings with the Registrar.

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

A description of the anticipated business is included in the LPA.

Minimum number of incorporators / shareholders and residency requirements

An ELP must be formed with at least one GP and one LP. At least one GP must be resident/incorporated/registered in the Cayman Islands. There are no Cayman Islands residency requirements for LPs.

Minimum number of directors (or other applicable officers) and residency requirements

An ELP must be formed with at least one GP and at least one GP must be resident/incorporated/registered in the Cayman Islands.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

There are no statutory provisions with respect to minimum capital contributions to an ELP. Each partner will make contributions to the ELP in accordance with the terms of the LPA. There are no statutory requirements regarding bank accounts for ELPs.

Is the physical presence of incorporators/directors/shareholders required in the jurisdiction for incorporation, formation, or organisation?

Each ELP must have a registered office in the Cayman Islands in order to file the ELP registration with the Registrar. At least one GP must be resident/incorporated/registered in the Cayman Islands for registration of the ELP.

Is a tax identification number, or equivalent, required? If so, how is it obtained?

No.

What is the title of the applicable company registry?

The Registrar of Exempted Limited Partnerships.

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.:

A registration statement (and any changes to it) must be filed with the Registrar, but it is not open to public inspection. It is optional to file the LPA with the Registrar and, regardless of whether it is filed with the Registrar or not, it will not be open to public inspection.

The GP is required to maintain a register of limited partners containing the name and address of each person who is an LP, together with the date upon which a person became, and ceased to be, an LP. The GP is not required to file the register of limited partners with the Registrar nor is it open to public inspection.

An ELP is not required to file with the Registrar information with respect to group structure nor is this information open to public inspection.

The GP is required to maintain a record of the amount and date of the contributions of each LP and the amount and date of any payment representing a return of the whole or any part of the contribution of any LP. The GP is not required to file the record of contributions with the Registrar nor is it open to public inspection.

The ELP's registration statement, which contains the name and address of the GP, must be filed with the Registrar but it is not open to public inspection.

An ELP is not required to file its accounts with the Registrar (although if it is licensed or regulated in the Cayman Islands, it may be required to file its audited accounts with the relevant regulatory authority pursuant to the relevant regulatory law) nor is this information open to public inspection.

Members of the public may conduct a search of the Register of Writs and Other Originating Process of the Ground Court of the Cayman Islands for actions or petitions pending in the Grand Court against an ELP. However, that search will not reveal (among other things) if: proceedings filed with the Grand Court have not been entered in the Grand Court Register or if proceedings have been filed after the search; any application to the Grand Court for a winding-up petition or for the appointment of a receiver in respect of any person or entity has been prepared but not yet filed; any proceedings against any person or entity have been threatened but not filed; any person or entity is in voluntary liquidation; a receiver had been appointed under a debenture or other security agreement in respect of the assets of any person or entity; or any person or entity is a defendant or respondent to any arbitration proceedings. A certificate of good standing issued by the Registrar in respect of an ELP may only be obtained by the ELP's registered office provider and is not open to public inspection. In connection with a voluntary winding up of an ELP, the GP (or other person appointed pursuant to the LPA) must, among other things, file notice of the winding up with the Registrar and publish notice of the winding up in the Cayman Islands Gazette (which is searchable by the public).

The GP must maintain a record of any agreement pursuant to which any LP has granted a security interest in respect of the whole or part of their partnership interest. The register must contain the identity of the grantor or grantee, the partnership interest or part thereof subject to the security interest and the date on which notice of the security interest was validly served on the ELP at its registered office. The GP is not required to file the register of security interests with the Registrar but it is open to inspection by any person during all usual business hours in the place where the register is maintained.

An ELP is not required to file with the Registrar details of any liens or encumbrances on its assets nor is this information open to public inspection.

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

The GP is the executive body of an ELP. The full responsibilities of the GP are set out in the LPA.

How are the members of the executive body appointed, dismissed and replaced?

The LPA governs the terms on which the GP is appointed, dismissed, and replaced. In addition, the ELP Act provides that a statement in respect of any transaction consequent upon which any person will be removed, replaced or admitted as GP of an ELP must be filed with the Registrar within 15 days of the transaction and such removal, replacement or admission will not be effective until such notice has been filed.

Is it possible to appoint corporate directors or must all directors be natural persons?

Entities can be and are typically the GPs of ELPs.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

N/A.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

The owners of an ELP are (the GP and) the LPs. Subject to any express provisions of the LPA to the contrary, an LP owes no fiduciary duty in exercising its right or obligations to the ELP or any other partner. The ELP Act provides that an LP shall not take part in the 'conduct of the business of an ELP' in its capacity as an LP. Accordingly, all letters, contracts, deeds, instruments or documents should be entered into by the GP on behalf of the ELP. Helpfully, the ELP Act provides a non-exhaustive list of activities which are commonly undertaken by an LP and which are specifically not deemed to be taking part in the conduct of the business of the ELP. These include: holding an office or interest in, or having a contractual relationship with, a GP, or being a contractor for or an agent or employee of the ELP or of a GP, or acting as a director, officer or shareholder of a corporate GP; consulting with and advising a GP or consenting or withholding consent to any action proposed, in the manner contemplated by the LPA, with respect to the business of the ELP; investigating, reviewing, approving or being advised as to the accounts or business affairs of the ELP or exercising any other right conferred by the ELP Act; acting as surety or guarantor for the ELP either generally or in respect of specific obligations; approving or disapproving an amendment to the LPA; calling, requesting, attending or participating in any meeting of the partners; taking any action that results in the winding up or the dissolution of the ELP; taking any action required or permitted by the LPA or by law to bring, pursue, settle or terminate any action or proceedings brought pursuant to section 33(2) of the ELP Act; appointing a person to serve on any board or committee of the ELP, a GP or an LP or removing a person therefrom; serving on, or appointing a representative to serve on, any board or committee of the ELP, a GP, the LPs or the partners, including giving advice or consenting, or refusing to consent, to any action proposed by the GP on behalf of the ELP and exercising any powers or authorities or performing any obligations as a member of that board or committee in the manner contemplated by the LPA; serving on the board of directors or a committee of, consulting with or advising or being an officer, director, shareholder, partner, member, manager, trustee, agent or employee of, or by being a fiduciary or contractor for, any person in which the ELP has an interest or any person providing management, consultation, custody or other services or other products for, to, or on behalf of, or otherwise having a business or other relationship with, the ELP or a GP of the ELP; and voting as an LP on the dissolution and winding up of the ELP, the purchase, sale, exchange, lease, mortgage, pledge or other acquisition or transfer of any asset by or of the ELP, the incurrence or renewal of indebtedness by the ELP, a change in the nature of the business of the ELP, the admission, removal or withdrawal of a general or LP and the continuation of business of the ELP thereafter or transactions in which one or more of the GPs have an actual or potential conflict of interest with one or more of the LPs. If an LP takes part in the conduct of the business of an ELP (ie, outside of the safe harbours noted above) in its dealings with persons who are not partners, that LP will be liable, in the event of the insolvency of the ELP, for all debts and obligations of that ELP incurred during the period in which that LP participates in the conduct of the business as though that LP were, for that period, a GP. However, that LP will be liable only to a person who transacts business with the ELP during the period with actual knowledge of that LP’s participation and who then reasonably believed the LP to be a GP.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

The majority and quorum requirements for decisions by the partners of an ELP are set out in the LPA and can be changed by amending the LPA in the manner set out in the LPA.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

Pursuant to the ELP Act, a GP must act at all times in good faith and, subject to any express provisions of the LPA to the contrary, in the interests of the ELP. Otherwise, there are no special governance regimes in respect of an ELP (except that an ELP that is licensed or regulated in the Cayman Islands may be required to comply with regulatory measures with respect to corporate governance, internal controls and other matters prescribed by the relevant regulatory authority).

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

A GP must maintain proper books of account that give a true and fair view of the business and financial condition of the ELP and to explain its transactions. However, a GP is not required to file the ELP's accounts with the Registrar or any other government or regulatory authority (unless the ELP is licensed or regulated in the Cayman Islands and is required to file them with the relevant regulatory authority pursuant to the relevant regulatory law).

Is the entity permitted to determine its own financial year?

Yes.

Is the entity subject to any statutory (external) auditor obligations?

There is no requirement for an ELP's accounts to be audited (unless the ELP is licensed or regulated in the Cayman Islands and is required to have its accounts audited pursuant to the relevant regulatory law).

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

There is no statutory requirement for an ELP to appoint specific executive officers, a secretary, an internal auditor/accountant or any other persons (unless the ELP is licensed or regulated in the Cayman Islands and is required to have its accounts audited pursuant to the relevant regulatory law, in which case it would be required to appoint an auditor). To the extent any such persons are appointed, there are no residency requirements for such persons (except that if an ELP is licensed or regulated in the Cayman Islands and is required to have its accounts audited, it may also be a requirement pursuant to the relevant regulatory law for the appointed auditors to have a presence in the Cayman Islands).

If an ELP engages in 'relevant financial business' within the meaning of the Proceeds of Crime Act (as amended) of the Cayman Islands, then the GP must appoint natural persons to act as the ELP's anti-money laundering compliance officer, money laundering reporting officer and deputy money laundering reporting officer. There are no residency requirements for these persons.

If an ELP is a 'Cayman Reporting Financial Institution' within the meaning of the Tax Information Authority (International Tax Compliance) (Common Reporting Standard) Regulations (as amended) of the Cayman Islands and/or a 'Reporting Financial Institution' within the meaning of the Tax Information Authority (International Tax Compliance)(United States of America) Regulations (as amended) of the Cayman Islands then the GP must appoint a principal point of contact for dealings with the Cayman Islands Tax Information Authority (TIA), an authorising person who is authorised to notify TIA of changes to the principal point of contact and a responsible officer for purposes of the US Foreign Account Tax Compliance Act (FATCA). There are no residency requirements for these persons.

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

Partnership interests.

Are different classes of ownership interests possible? If so, what are some examples of different classes?

It is possible for an ELP to have different classes of partnership interests with different rights, restrictions, terms and conditions, which would typically be set out in the LPA.

What documentation is required for the transfer of ownership interests?

Transfers of partnership interests are governed by the LPA.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

Transfers of limited partnership interests of an ELP must be recorded in the register of limited partners and record of contributions, but there are no other formal requirements or approvals (unless the ELP is licensed or regulated in the Cayman Islands and is required to seek the prior consent of, or provide notice to, the relevant regulatory authority pursuant to the relevant regulatory law).

Are there any applicable stamp duties imposed when transferring ownership interests?

There is no Cayman Islands stamp duty payable on the transfer of partnership interests of an ELP .

How are shares issued? (including information on payment obligations, registration requirements)

Partnership interest issuances would be governed by the LPA.

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

An ELP may accept from partners contributions in cash, property, services or other assets. Cayman Islands law does not prescribe a specific method for valuing non-cash contributions.

An ELP may receive contributions from shareholders without issuing new partnership interests.

An LPA will often include provisions pursuant to which partners commit to making contributions and the GP may drawdown or call capital.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

Partnership interest withdrawals would be governed by the LPA.

Any requirements with respect to distributions to shareholders?

Distributions to partners would be governed by the LPA.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

The governing agreement of an ELP is the LPA, but side letters as between the GP acting on behalf of the ELP and LPs are not prohibited by statute.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

An annual fee of approximately US$2,500 is payable to the Registrar. The annual fee is reduced to US$1,465 for ELPs regulated by the Cayman Islands Monetary Authority. Additional administrative fees are typically payable to the ELP's registered office provider.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

The Cayman Islands has no corporation tax, income tax, capital gains tax, inheritance tax, wealth tax, or any tax applicable to ELPs. An ELP may apply for an undertaking from the Cayman Islands authorities that for 50 years from the date of issue of the undertaking, no law enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations will apply to the ELP or any of its partner and, in addition, that no such tax or any tax in the nature of estate duty or inheritance tax will be payable in respect of the obligations of the ELP or the interests of its partners.

Summary of any specific matters, e.g. recent or prospective major legal developments

Every entity incorporated or registered in the Cayman Islands, including an ELP, will be required to notify TIA annually, and as a prerequisite to filing the ELP's annual return, of whether or not it is carrying on a 'relevant activity' for the purposes of the Cayman Islands economic substance regime. The definition of 'relevant activity' includes banking business, fund management business, insurance business, distribution and service centre business, financing and leasing business, headquarters business, holding company business, intellectual property business and shipping business and excludes 'investment fund business' (meaning the business of operating as an investment fund), and entities that are tax resident outside of the Cayman Islands.